New Delhi: Terming over 9% food inflation as “not acceptable”, finance minister Pranab Mukherjee on Thursday expressed hope that government policies and a good monsoon will help ease pressure on price front.
“... Food inflation at the level of 9% is not acceptable. I do hope the measures taken to remove supply constraints in some of the agricultural commodities and good monsoon will help to have further moderating influence on the prices of food and other essential commodities,” he told reporters here.
His comments came after food inflation fell to 9.03% for the week ended 6 August from 9.90% in the previous week, even though prices of all items, barring pulses, continued to rise on an annual basis.
He said despite food inflation falling from around 22% in February, 2010, it still remains high.
Mukherjee said the international situation was not conducive, especially with regard to high commodity prices.
“International situation is not very favourable. Commodity prices are high, including of fuel. Therefore, the prices of industrial raw material, other commodities and fuels are uncertain,” he said.
He said the government is trying to ensure that the rate of inflation moderates.
“I hope the monetary policy adopted by the Reserve Bank of India, along with various measures taken by the (finance) ministry... it will be possible to have a moderating influence on the inflationary front,” Mukherjee said.
The government has taken various steps to curb the rate of price rise in food items, including a reduction of import duties on wheat, rice and pulses, a ban on the export of non-basmati rice and the suspension of futures trading in rice, urad and tur dal.
In addition, the government has extended the stock limit orders for pulses, paddy and rice and reduced import duty on skimmed milk powder, among other measures.
The RBI has hiked interest rates 11 times since March, 2010, to curb inflation. Headline inflation has been above the 9% mark since December last year and stood at 9.22% in July this year.
The fall in food inflation numbers could be attributed to a moderation in the rate of price rise of some of the items on a week-on-week basis, even though they continued to be more expensive on an annual basis.
The decline could also be attributed to the high inflation figure of over 14% for the corresponding year-ago period, a phenomenon dubbed the ‘high base effect’ in economic parlance.
As per data released by government on Thursday, price of pulses became cheaper by 5.63% year-on-year during the week under review. However, all other items continued to remain expensive.
Overall, primary articles recorded 11.64% inflation for the week ended 6 August, down from 12.22% in the previous week.
However, inflation in non-food articles, which include fibres, oil seeds and minerals, went up to 16.07% from 15.05% in the previous week.
Meanwhile, fuel and power inflation stood at 13.13% for the week ended 6 August, up from 12.19% in the week ended 30 July.